The Federal Reserve Board of Governors has approved the $402 million acquisition of Suffolk Bancorp by Bridgeport, Connecticut-based People’s United Financial, People’s said Friday.
The deal to buy the parent company of Suffolk County National Bank can’t close for 15 calendar days but must close within three months, according to the Federal Reserve order.
People’s and Riverhead-based Suffolk Bancorp agreed to the deal in June 2016.
The Suffolk Bancorp news comes less than two weeks after Lake Success-based Astoria Financial Corp. agreed to be acquired by Montebello, New York-based Sterling Bancorp in an all-stock deal worth $2.2 billion.
“There will certainly be fewer mid-sized banks based on Long Island now,” said Art Loomis, president of Northeast Capital, a boutique investment bank that concentrates on financial institutions.
But Loomis said fewer local banks, as well as relaxed regulations, could lead to more de novo, or startup, banks in the region.
“Long Island has been a birthplace for some de novo banks, such as Empire National Bank and Gold Coast Bank,” Loomis said. “But the faucet turned off as regulatory compliance increased.”
At People’s, Howard C. Bluver, president and CEO at Suffolk County National Bank since 2012, will stay on as New York market president.
Suffolk County National Bank’s 27 branches are expected to take on the People’s United name after the merger closes.
People’s already has 57 branches on Long Island, including 33 in Stop & Shop locations, according to the bank.
Suffolk County National Bank said late last year it would lay off 76 back-office and administrative workers once the merger was completed. In an interview last month, Bluver said, “some of those people have already found jobs elsewhere.”
Once the deal closes, People’s Bancorp will have consolidated assets of $43 billion, according to the Federal Reserve.